Government Executive - Authors - Timothy B. Clark

Raise the Debt Ceiling or Issue a $1 Trillion Coin?

Timothy B. Clark — Fri, 24 Mar 2023 08:00:00 -0400

Could the minting of a $1 trillion platinum coin avert a chaotic breach of the national debt ceiling, at least for a while?

The idea gained a new flurry of interest earlier this year, when the Treasury Department began a series of “extraordinary measures” to extend its spending horizon. These patches will run their course, as early as June, and then the Treasury will have to reduce payments to Social Security beneficiaries, the Pentagon and others with claims on the federal fisc. Unless, of course, Congress raises the debt ceiling, or the Mint issues the trillion dollar coin.

In its 225th year, the U.S. Mint is perhaps the oldest and least newsy part of the federal bureaucracy. Highlighted on its website now: the second in a series of five sets of quarters honoring women from all walks of life. This and other series have told the story of America over the centuries.

Since 1986, the Mint has produced bullion coins for investors, first in silver and gold, then in platinum and palladium. Available through authorized dealers, they are designed to be physical additions to investors’ financial portfolios. The denominations of coins range up to $100. But a $50-denominated gold coin that will be put on the market on March 30 will weigh one ounce, worth about $2,000 on today’s market.

So it would be a big day at the Mint if it suddenly produced a $1 trillion coin, even if the actual production process would only require a minor adjustment in the dye used to stamp out today’s $100 coins.

It’s not so far-fetched. As The New York Times reported on Feb. 2, the hashtag #MintTheCoin was trending strongly on Twitter:

What was once a fringe idea is now being presented to top economic policymakers as a serious remedy.

Asked on Wednesday [Feb. 1] about the notion that there might be another option if Congress failed to lift the borrowing cap, Jerome H. Powell, the Federal Reserve chair, said there was not.

“There’s only one way forward here, and that is for Congress to raise the debt ceiling so that the United States government can pay all of its obligations when due,” Mr. Powell said. “Any deviations from that path would be highly risky.”

Treasury Secretary Janet L. Yellen was unable to avoid the debt limit crisis brewing back in the United States as she crisscrossed Africa last week and fielded queries about the coin, which she dismissed as a “gimmick.”

Instead, Ms. Yellen sent two stern letters to Speaker Kevin McCarthy outlining the “extraordinary measures” she was taking to ensure the United States can keep paying its bills and urged Congress to “act promptly” to protect the nation’s full faith and credit by lifting the debt limit.

This correspondent recalls a very similar debate during the Obama administration, when officials were also struggling against opposition to raising the national debt ceiling. The brouhaha seemed to demand a bit of doggerel. It was duly composed and then published on Jan. 16, 2013:

Platinum Blues

It seemed so simple, so savvy, so smart,
Like an elegant piece of minimalist art,
Until Treasury itself conspired to enjoin
The fabulous platinum trillion-dollar coin.

Who needs Congress to fix our national debt
When the mint can fire up and quickly beget
A token that allows us to borrow more dough
So our passion for spending can continue to grow?

White House press guy Jay Carney softly demurred
When asked if the big minting might ever occur;
Columnists like Krugman, and congressmen too,
Cheered the platinum fix to our debt ceiling blues.

‘Twas too good to be true in the cold light of day:
Carney kicked the response over Treasury’s way,
Where spokesmen conceded the ceiling could shift
Only if Congress would give it a lift.

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12 Big Problems That Government Urgently Needs to Address

Timothy B. Clark — Fri, 15 Nov 2019 16:39:28 -0500

What should government do over the next decade? And how should it go about achieving its goals?

The first question is at the heart of the 2020 presidential campaigns, the second a bit less so. But both are important and timely.

That’s why the National Academy of Public Administration spent a year identifying what it calls the 12 Grand Challenges facing the public administration field. NAPA is an organization of professors and deans, senior career federal officials and people who have worked in state and local governments. It has a congressional charter to provide advice on public sector issues.

Remarkably, the committee that framed the Grand Challenges (on which I served) ranged far beyond dry topics of government organization, although they are also addressed in the new NAPA report. We found it impossible to frame how government should be organized without also considering what it should do.

So, for example, the Grand Challenges include making sure that the United States is deeply engaged with the rest of the world, in our economic and national security interests. Fostering social equity is another challenge; the report observes that “a growing divide in income and wealth has left many people behind based on their race, gender or geographic location, and many groups are marginalized or excluded from the political process.” NAPA urges addressing issues such as affordable housing, criminal justice, education and access to technology.

The fiscal health of the federal sector and of state and local governments is also on the list. The huge structural deficit Washington has created is unsustainable, experts agree, and most states haven’t fully recovered from the Great Recession. Thus, NAPA observes, elected officials find they don’t have enough money to meet their campaign promises, or to invest in future growth—with insidious effects on citizens’ trust in government.

Climate change is a problem regions of the country are already trying to address, and one that demands more vigorous action from the public sector, says the report. And in a nod to the mundane but vital topic of water safety and sustainability, it also demands that ways be found to raise the hundreds of billions of dollars needed to ensure water safety and sustainability across the country.

Technology topics make the list as well, as the report suggests more government action to promote data security and personal privacy, and preparation for the coming age of artificial intelligence. “Adversarial AI” is now being used to doctor videos, putting words into the mouths of people who didn’t say them, observed Ramaya Krishnan of Carnegie Mellon University. So public authorities are challenged to aid citizens in identifying misinformation and disinformation—to stem the continuing erosion of trust in what experts and the media report.

Running through the two days of discussion at NAPA’s annual meeting in early November was deep concern about people’s lack of trust not only in government but in established expertise in other fields, notably science. The phenomenon of denying climate change, or challenging the idea that our life choices contribute to it, is all too familiar by now. But that’s far from the only example. For example, while 83 percent of scientists believe that genetically modified food is safe to eat, only 37 percent of the public shares that view. This gloomy data came from Chavonda Jacobs-Young, administrator of the Agricultural Research Service and acting chief scientist at USDA. Continuing innovation, and public acceptance of technological advances, is essential to the task of feeding a world population that’s expected to grow from 7 billion today to 10 billion 30 years from now, Jacobs-Young said.

Trust in municipal water is running low, we learned during one panel meeting. That’s contributing to people’s decisions to buy roughly $20 billion in bottled water per year. And, indeed, there’s reason to worry, panelists said, especially in rural America. It will take up to $1 trillion to fix the problem over the next quarter century, and the solutions entail revised governance arrangements among various levels of government and the private sector.

NAPA wants to play a part in addressing the income divide. It demands more “social equity,” and programs to help the millions of working-age Americans who are not working nor seeking work to gain the skills they need in our rapidly automating economy. Panelists said Congress is taking note of the need: a bill introduced by Sen. Mark Warner, D-Va., would provide for tax-advantaged training savings accounts to promote life-long learning.

Reskilling workers as technology advances is a problem that confronts the federal civil service, and state and local governments as well. Employers can’t afford to give and employees can’t afford to take six months or a year off to get retrained, so better ways of delivering the training must be developed.

NAPA’s focus has long been on federal issues, and it draws on expertise among its 950 fellows and its staff to help agencies improve their operations. But among the fellowship there’s also a growing impulse to address the many problems confronting state and local governments.

Not the least of these are the debilitating shortages of funds in many communities.

Says the Grand Challenges report, “States and localities account for more than one-third of all government spending. Their finances have only recently recovered from the Great Recession, and they continue to face near-term difficulties due to such factors as rising health care costs. Some states have cut taxes without corresponding spending cuts, while others have increased spending without corresponding revenue increases. Many state and local balance sheets have a time bomb of unfunded pension liabilities that could easily crowd out public investments in such areas as education and infrastructure over the next decade.

“This pressure of long-term structural fiscal trends at all levels of government hinders fiscal democracy, as elected officials have a limited ability to apply funds to the programs for which they promised action when running for office, and makes it more difficult to invest in the future.” This too, it seems clear, can undermine people’s trust in American democracy.

Money is not the only problem afflicting states and local governments. Another is the growing desire on the part of state legislators to strictly limit the powers of local governments. At a meeting of the academy’s intergovernmental panel, Rep. Gerry Connelly, D-Va., remarked on the 19th century “Dillon Rule” barring local governments from exercising any power not expressly authorized by the states. Fairfax County, the populous Washington suburb, even had to apply to the state for authority to paint the tops of its school buses white, Connelly said. Blanket rules like this, and other anti-home rule decisions in many states--such as successes by the plastic bag lobby in resisting fees on plastic bags, are a growing problem for municipal officials.

Addressing the 12 challenges NAPA identified over the next decade would greatly improve our nation’s prospects. Let’s hope we have the will to succeed.

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An Immigrant’s Journey to Congress

Timothy B. Clark — Mon, 07 Jan 2019 17:02:16 -0500

When Tomasz Malinowski arrived on American shores at the age of 6, speaking nary a word of English, few could have imagined that one day he would be sworn in as a member of Congress. But that happened last Thursday, in a highly emotional day for Tom, his Polish-American mother, his daughter and his extended family—of which I am a member.

His was one of many compelling stories playing out on Capitol Hill as the largest freshman class elected to the House of Representatives in many years was sworn in. The class included a record number of women, the youngest woman ever elected to the House, the first Muslim women to serve and many people who had put themselves on the line to run grueling, exhausting races.

A day spent in the Capitol complex, watching and participating in ceremonies surrounding the advent of the 116th Congress, provided a behind-the-scenes look at the organized chaos that brought the new Democratic House majority to power.

Crowds celebrating the newcomers, both Democrat and Republican, spilled out into the corridors of congressional office buildings from morning to evening. Many of the new legislators opened their doors to their supporters at 10 a.m. or before. In fact, these buildings are always open to the public, with only the requirement of passing through a metal detector as one enters. A line of perhaps 50 people was waiting to get into the Cannon House Office Building when we arrived, but it moved quickly.

Our family group was invited to show up at 11 a.m., because Tom, already in demand by the media, had two television interviews scheduled earlier. He did five or six during the day, including one on MSNBC.

Day of the Pins

Tom and other members of the House were sporting handsome, large, enameled red and gold lapel pins indicating their status. And they weren’t the only ones whose lapels were so bedecked.

Indeed, it seemed virtually everyone felt the need to say something on their clothing. It’s not a new phenomenon in Washington, where many pols always stick an American flag pin in their lapels for fear anyone might think them less than patriotic. But the plethora and variety of adornments was striking.

Across the hall from Tom’s office, a dozen people clustered in front of another member’s office. One sturdy man in a blue suit looked like he might be a legislator, but when asked, said he was not. What’s the lapel pin? “Oh, it’s just the bank’s,” he replied. What bank? “Our bank, you know. All the corporate reps are wearing their pins today.”

So the day of the lapel pin was also the day of the lobbyist. It was not only the first day of lobbying in the actual lobbies and corridors of Congress, but also a very good day to do it. Members’ doors were open, and the fledgling and incomplete staffs of freshmen were fielding business cards and introductions from all sorts of interests. In Tom’s office, for example, two lapel pin-wearers came in to represent the concerns of the New Jersey Broadcasters Association (over-the air, not cable networks). The group’s CEO, Paul S. Rotella, offered his services if the congressman had any problems with the networks.

Raymond Adams, a senior air traffic controller, was there as well, sporting the pin of the National Air Traffic Controllers Association. He leads the Federal Aviation Administration’s controller workforce at Newark Airport, and his overworked crew is not currently being paid because of the government shutdown. Citing safety concerns, NATCA has called for a quick end to the closure.

Pols of varying types were clustering around as well. One of them, Bette Jane Kowalski, sported the pin of the Union County Board of Chosen Freeholders. She is vice chair of that elected body, and was an early supporter of Tom’s candidacy. And members themselves were handing out lapel pins: Rep. Earl Blumenauer, D-Ore., head of the Congressional Bike Caucus, distributed one featuring a small fluorescent bicycle.

Tom’s chief of staff, Colston Reid, cheerfully juggled the demands for his time all morning, until she locked the door to the office suite and we all headed over to the Capitol.

Swearing Them In

For 20 minutes, Reid led us through the maze of underground corridors that connect the Capitol and surrounding House and Senate office buildings. Finally, we reached a tougher security checkpoint and then an elevator that whisked us up to a corridor running along the galleries overlooking the House floor. Members had already been sworn in and taken their first few votes.

But that swearing-in, just after noon, was just the first of the day. Two more were to come.

We were soon led to Statuary Hall. Amid the milling throngs, Tom found our group and led us through a line that snaked into the adjacent Rayburn room for a ceremonial swearing-in with newly elected House Speaker Nancy Pelosi. As she stood next to Tom, his hand on the Bible, she said to our party of 11, “We are so lucky to have someone with Tom’s experience, especially in foreign affairs, joining us. He will do great things in the House.”

The third swearing-in came in Memorial Hall on the first floor of the James Madison annex of the Library of Congress. Officiating this time was Pelosi’s top lieutenant, House Majority Leader of the House Steny Hoyer of Maryland. Hoyer was an early supporter of Tom’s. In front of a large marble statue of Madison, a rabbi gave a moving invocation and then Hoyer administered the oath of office before a crowd of perhaps 300 people who had come down from New Jersey to wish Tom well.

An American Journey

Tom is now 53 and as American as can be. But one only imagine how apprehensive he must have been when he first arrived in this country.

His mother, Joanna Rostropowicz, was moving to the United States to marry my father, who lived in New York City and Princeton. Young Tomasz was sent straight into the Princeton public schools. At the age of 10, he went with his mother to the courthouse in Newark to be sworn in as a new citizen of the United States. There he took an oath whose words he repeated upon becoming a member of Congress:

I, Tom Malinowski, do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion.

That was a moment of high emotion for Tom, his mother recalls--and he spoke movingly of the two oaths during his remarks in the Madison Library.

Tom went on to attend the University of California at Berkeley and then won a Rhodes Scholarship to study at Oxford. There he met a Burmese refugee whom he later married. They have a Polish-Burmese-American daughter named Emily. Tom’s stepfather, my father, Blair Clark, was long active in Democratic politics, and Tom learned a love of the game. He went to work for New York Sen. Daniel Patrick Moynihan, which led to a job in the State Department writing speeches for Secretaries Warren Christopher and Madeleine Albright. Toward the end of the Clinton administration, Tom moved to the National Security Council staff at the White House and traveled the world on Air Force One writing remarks for the president. He later served in the Obama administration as assistant secretary of State for democracy, human rights and labor.

In his television interviews, and in his remarks to supporters at the end of the day, Tom declared himself not in a “celebratory but in a somber mood.” He talked about the government shutdown, people going without paychecks and trash piling up in the national parks. He said the Democrats now “have a fragile foothold in one House of Congress,” and suggested that their job in the next two years would not be to “transform America but to preserve it.”

Tom’s journey was celebrated not just in the United States but also in Poland. He is the first son of Poland to be elected to Congress since before World War I. And his mother is a minor celebrity there, having published six novels in her native country. A Polish television correspondent arranged to interview her outside of the Cannon building on swearing-in day.

Tom is one of a handful of new lawmakers whose elections have resonated beyond their districts and states. Their national, and even international, appeal can only strengthen the reputation of our durable democracy.

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Looking for a Leader to Help Government Work Better

Timothy B. Clark — Mon, 29 Aug 2016 16:14:45 -0400

When Dan G. Blair announced recently that he would retire after five years as president of the National Academy of Public Administration, his decision opened up a job with a lot of potential for shaping the debate about government.

NAPA’s congressional charter gives it a broad mission to help improve the manner in which public purposes are pursued. And the opening comes at a time when established systems of governance are increasingly in question and in need of fresh approaches.

NAPA posted a position description for the job on its website Monday, along with a paper describing the range of governance challenges facing the nation. The search is being led by Mark Pisano, a professor at the USC Sol Price School of Public Policy and NAPA board member.

In announcing the search, the NAPA board of trustees declared that “the very design, nature and operation of our country’s vital public institutions have been variously characterized as being in a state of institutional crisis, dysfunction, decay, chaos, failure and imminent collapse.”

Relations between the various levels of government in the United States offer one example: there is little agreement, for instance, between the federal government and many state governments on issues of fiscal policy, education, infrastructure, election equity and more.

And many societal challenges today demand intersectoral solutions involving governments, businesses, civic groups and the nonprofit sector.

NAPA’s bread and butter since its founding in 1967 has been in the traditional fields of public administration and management: planning, budgeting, performance management and measurement, financial management and accounting, human resource management, program design and management, communications and information management, technology management, asset management, procurement, auditing, evaluation and accountability.

The academy has served as an adviser to many agencies on these kinds of topics. Expert panels drawn from more than 600 elected fellows oversee its studies.

Photo: Flickr user m01229

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Cuba Diary: Inside the American Diplomatic Effort

Timothy B. Clark — Fri, 05 Feb 2016 16:58:25 -0500

HAVANA--When the United States moved in 2014 to improve relations with communist Cuba, the State Department turned to a longtime Senior Foreign Service Officer, Jeffrey DeLaurentis, to represent American interests in Havana.

On a visit to Cuba last month, I sat down with DeLaurentis, seeking to understand the work he and others have done to facilitate resumption of formal diplomatic relations for the first time since 1959.

By the time of my visit in January, the two countries had reestablished their embassies, but it was clear that much more work would be needed before full relations could be restored. Cuba, for example, wants the United States to lift its ongoing embargo on trade and tourism and to return the U.S. naval base in Guantanamo. The American government insists that the Cuban regime grant more freedom to its citizens.

Jeffrey DeLaurentis speaks at the flag-raising ceremony at the newly re-opened U.S. Embassy in Havana in August. (State Department)

I wanted to learn from DeLaurentis about the work preceding formal opening of our embassy on Aug. 14, and about next steps toward normalizing relations.

During my eight-day “people-to-people” visit with a group organized by Tufts University, I also sought to understand the Cuban revolutionary system and the current social and economic structures.

In the Embassy

The U.S. embassy has a forbidding mien, although when it was built in 1953 it was much admired by the architectural press. Its original travertine facing is long gone, replaced by gray granite. Tall metal security fencing protects its entrance. But, as Architect magazine observed in 2014, it remains a “functioning relic of Washington's postwar bid to use modern architecture to project its image as a triumphant, dynamic superpower.”

Abandoned in 1959, the building was reopened in 1977 as a “special interest section” under the aegis of the Swiss government. In 2006, the State Department mounted a Times-Square-style news ticker high up on the embassy’s facade to broadcast news and human rights messages in Spanish. Cuba’s then-president, Fidel Castro, reacted sharply to the move, renaming the area in front of the building “Anti-Imperialist Plaza” and installing a forest of tall flagpoles carrying black flags to block views of the billboard.

From inside the embassy’s tall gates, I snapped a picture of the towering flagpoles--123 of them, according to the Marine guards. Now, with relations easing, only a single Cuban flag flies in the rusting forest. Gone too is the large billboard the Cubans erected in 2007 depicting then-President George W. Bush as “El Asesino,” or the Assassin. And the lobby was decorated with work of Cubans who won an embassy-sponsored poetry and photo contest whose announcement last April was one small step toward better relations.

A forest of flagpoles is all that remains of Fidel Castro's effort to block a news ticker mounted on the American embassy. (Timothy B. Clark)

In the ambassadorial suite on the seventh floor, I asked DeLaurentis about the challenges of establishing a traditional embassy in this hot spot of Cold War tensions.

DeLaurentis has been in the Foreign Service since 1991, and served two tours in Havana before his current assignment began in 2014. He was confirmed by the Senate for an earlier posting at the United Nations, but stepped down from ambassadorial rank to take on the Cuba challenge as chargé d’affaires in Havana. The Obama administration, conscious of Republican opposition in Congress and among GOP presidential contenders to the thaw in bilateral relations, has not sent the Senate a nominee for confirmation to the post.

As we talked in his office, which looks down on the Malecón seawall promenade toward Old Havana, DeLaurentis said lack of Senate confirmation wasn’t slowing him down. He tries to be “ubiquitous” in Havana, he said, showing the flag at social, cultural, diplomatic and other events, and meeting with ever more frequent delegations of Americans interested in Cuba’s future.

Two Tracks

DeLaurentis said the embassy’s work was proceeding on two tracks: working with Washington colleagues in the overall effort to reestablish relationships after more than five decades of hostility, and working to create an embassy with sufficient staff and capabilities to administer evolving U.S. policies.

The thaw began on Dec. 17, 2014, when President Obama announced from the White House that he would pursue reestablishing diplomatic relations with Cuba in the wake of a prisoner exchange. DeLaurentis, already in charge in Havana, would spend the next six months focusing on steps that would have to precede the formal opening of embassies in the two capitals. The process remained contentious at home. When, for example, the Obama administration met one of Cuba’s demands by removing it from a list of state sponsors of terrorism on May 29, 2015, GOP leaders denounced the move.

DeLaurentis said Cuba had wanted assurances about the behavior of U.S. diplomats as they maintained their contacts with civilian society--alluding to Cuban suspicions that the American government had been encouraging active dissent.

The United States had its own list of issues to be resolved--some of which would be handled routinely with any other country. Importantly, said DeLaurentis, the embassy needs to augment its 40-person diplomatic staff. The count does not include Marine guards or Cuban nationals who perform maintenance duties in the embassy compound.

U.S. officials wanted the embassy to be more accessible to visitors--Cubans and others. They demanded that the phalanx of Cuban guards ringing the embassy be removed. When I arrived, a small group of people were queued at one entrance, and no Cuban guards were in evidence.

The embassy needed supplies from the United States, including some in secure containers that would not be opened for inspection. And American officials wanted their diplomats to be free to travel in Cuba without first securing permission from the government.

Adding staff is critical, DeLaurentis said, because of the rapid growth in the number of of Americans visiting the island. He’s hoping to expand citizen services and public affairs staffs to handle “many, more educational and cultural exchanges.” Most trips are for “purposeful travel,” such as tour on which I traveled to the country. Artists and entertainers are showing up in increasing numbers too: As The Wall Street Journal observed in a Jan. 29 article headlined “The American Invasion of Cuba,” “culture always moves faster than government.”

The embassy has facilitated visits by three Obama Cabinet members, the deputy secretary of the Homeland Security Department, and various State Department officials. Four governors have visited since relations were relaxed. While we were there, Virginia Gov. Terry McAuliffe was traveling in the country with a delegation of about 20 business executives.

Commercial links remain difficult, because the U.S embargo instituted in 1960 remains largely in place. In Havana, McAuliffe’s delegation concluded a deal for cooperation between the Port of Virginia and Cuba’s big, newly developed, mega-port in Mariel, in the hope of boosting trade when political conditions allow.

The evening before my visit, DeLaurentis had welcomed the Virginia delegation with a reception at the elegant U.S. residence in the upscale Miramar neighborhood of Havana. The neoclassical limestone building, built in 1941, contains 65 rooms, including spacious, elegant chambers for receptions on July 4th and other occasions. Many ambassadors are wealthy political donors, but DeLaurentis is not one of them. He observes with a grin that the building’s grandeur notwithstanding, he must “stay within the budget” for parties there.

Long and Complicated

DeLaurentis and his colleagues are rowing against the tides of a half-century of history.

At the Summit of the Americas in Panama in April 2015, Cuban President Raul Castro told Obama: “No one should entertain illusions. It is true that we have many differences. Our countries have a long and complicated history…. We are willing to discuss everything, but we need to be patient--very patient.”

As we traveled, the Cuban socialist/communist system seemed deeply entrenched. Huge billboards along the roads celebrated the revolution. “La Revolución Seguirá Andelante” (“The Revolution Advances”), announced one huge billboard along a road. “Todo por la Revolución” (“Everyone is for the Revolution”), said another. Some 95 percent of adult Cubans belong to the Committee for the Defense of the Revolution.

We learned that people subsist on minimal incomes, but are guaranteed free health care, rationed food supplies and free education. Cubans also are promised lifelong employment--though the government in effect fired about 1 million people a few years back, and DeLaurentis estimates about a quarter of the workforce is in the “non-state sector.” The government says unemployment is extremely low--roughly 2 percent--but it’s evident that many are underemployed.

Students in a school devoted to the arts in the town of Santa Clara. (Timothy B. Clark)

In Santa Clara, we visited a school for artists, part of a network of meritocratic education that chooses children to advance in callings according to their ability. Our visit included performances by children aged 10 to 14 in ballet, folk dancing, instrumental music and singing. The best of them would be sent on for advanced training. The most talented could expect to perform in the nation’s capital, but even those who do not make it that far can expect steady employment entertaining the people of their towns.

Children without special talents are sent to technical schools. But Cuba makes a big effort to identify students who can be trained in medicine and other professions to serve not only its own population but other countries.

Exporting Talent

Venezuela has been an important export market for Cuban doctors, nurses and other professionals, whose services are exchanged for cheap oil, food and other goods. Newly minted graduates owe the state a two-year stint of service, and are given little compensation. Once they have met their obligation, some professionals choose to go abroad for two-year commitments that can earn many times the salaries that they would get at home. Our guide gave us the example of his sister: she is teaching economics in Guinea, and is paid $1,000 a month. Half of that is remitted to the Cuban government, but her remaining share is many times the salary she’d be paid at home.

So, while countries from Russia to France to the United States emphasize export of airplanes, weapons, machinery and other expensively manufactured items, Cuba exports its human capital. More than 50,000 Cuban medical workers are deployed in 66 nations around the world, according to the Medical Daily newsletter.

The average government salary is about $25 a month. Entry-level nurses earn about $24 a month, while top-performing doctors bring home up to $67. There’s a powerful incentive to get into the tourism industry, where tips can make a real difference in living standards. Our guide works for a state-owned tourism bureau, but at the end of the trip we gave him (and also our bus driver) more than $500 as a gratuity. A friend reports that his group gave its Cuban guide $1,400 as a tip for a week’s work.

Many of the hotels are owned by a branch of the military run by the little-known son-in-law of Raul Castro, Gen. Luis Alberto Rodriguez. The arrangement provides a significant amount of revenue for the government--and good jobs for retiring military officers.

Social services seemed well-organized and humane, as we observed during visits to a senior center and a facility for people afflicted with Down Syndrome. Of course, we were likely being shown only the best.

On a walking tour of Old Havana, an architect working for the government’s restoration agency showed us progress in renovating this part of the city’s crumbling housing stock. Apartments in pre-revolution buildings are now often occupied by three generations, a reflection of the shortage of housing in and around Havana. In their high-ceilinged ground floors, many families have created a second living space by erecting a platform halfway up the wall, on which one of the generations lives. With no windows and no ventilation, these ersatz dwellings have become known colloquially as “barbecues.”

The architect talks of how difficult it is to renovate such buildings, in part because the families don’t want to move to temporary housing with little prospect of returning to their longtime neighborhoods. Renovation, of course, entails removal of the barbecues. Despite the difficulties, about a third of Old Havana has been renovated.

The housing we’re shown is better than much of the stock elsewhere in Havana. Bill Thompson, a veteran journalist and photographer, later walked five miles from Old Havana back to our hotel through the roads a few blocks back from the oceanfront, and reported that conditions resembled Beirut, with crumbling buildings and crazily strung electrical wires. That confirmed the warning our our Frommer’s Cuba guidebook conveyed: Watch for falling stones.

Decent housing is only one of many problems challenging the Cuban people. The economy is hampered by a dual-currency system, a lack of investment, and state regulations that stand in the way of robust private enterprise. By world standards, Cuba isn’t truly poor, and it gets good marks on human development indexes. But economic conditions won’t improve much until the United States lifts its embargo and tourism takes off--a development not foreseen until 2017 at the earliest.

In anticipation of many more visitors, the Cuban government is renovating the old port of Havana to receive more cruise ships that ply the Caribbean. And Carnival has announced a spring cruise to the country. But it’s far from clear that Havana has the infrastructure--in transportation and hotels, for example--to handle a tourism boom.

Better Economy, More Freedom?

DeLaurentis is toiling to create conditions that might set the stage for lifting the embargo. He ticks off deals that have been completed or are on their way: a civil aviation agreement, resumption of postal services between the two nations, two environmental protection agreements and a deal to coordinate efforts to combat the narcotics trade. Among his 2016 objectives: to make sure these policy advances “become irreversible.”

On Jan. 26, the Obama administration announced new regulations allowing financing of authorized exports and re-exports to Cuba. Agricultural products are excluded, but the regulations allow export of important agricultural inputs such as pesticides, fertilizers and farm equipment. We’d seen the need for those in our travels, visiting a farm in Pinar del Rio province that was “organic” (and small) chiefly because it had no access to such inputs. Ancient but still functioning farm machinery imported from the communist bloc is found almost exclusively on state-owned farms.

Cuba's agricultural sector is woefully short of modern equipment. (Timothy B. Clark)

U.S. exports also will be allowed for products used to improve public transportation--which remains a fascinating hodgepodge in Havana and the countryside. In the capital, the fabled 1950s-era American cars are a genuine phenomenon. Many are immaculately kept, though now mostly powered by replacement diesel engines. Others are truly original: my wife and I took a ride in a bright pink 1940 Chevrolet convertible with its original gas engine.

People also ride in Russian Lada cars, other low-end imports, aging buses, pedicabs, and--especially in provincial cities like Santa Clara--horse-drawn vehicles with two benches allowing six or eight people to sit facing one another. There’s a fleet of tourist buses like the one we used, made in China.

DeLaurentis has helped establish a bilateral commission and other working groups to deal with thorny issues, such as human rights and property restitution. U.S. claims for properties seized during the revolution, originally valued at $1.8 billion, now total $7 billion, factoring in a half-century of interest. Cuba has counterclaimed for $117 billion in damages resulting from the embargo and the CIA’s secret paramilitary war against the Castro regime in the 1960s.

The embargo has continued as the Cuban communist regime has fomented trouble around the world, from the missile crisis of 1962 to the war in Angola against South African forces and CIA-backed rebels. The regime isn’t exporting revolution as it once did under such leaders as Ernesto “Ché” Guevara, removing one obstacle to better relations.

But freedom remains a huge issue, especially for the huge Cuban diaspora concentrated in Miami. Cuban expatriates follow the reporting of Havana-based Yoani Sanchez, whose Generación Y blog captures the small indignities and the lack of freedom that characterize everyday life on the island. A recent post laments that “one-sided state journalism continues to be a long way from objectivity and respect for the truth.”

DeLaurentis emphasized that the United States is working to secure increased freedom for the Cuban people. U.S. telephone companies Verizon and Sprint have recently signed deals with the Cuban monopoly telecommunications provider ETECSA, promising easier international calling. Since mid-2013, Cubans have been able to sign on to the Internet at 118 centers across the country, but at a rate of $2.00 an hour, an expensive proposition given that state salaries average around $20 per month. Phones, tablets and computers are beyond the reach of many. Still, DeLaurentis said the goal is to extend Internet access to half the population by 2020.

Although relations are thawing, most Cubans have seen little improvement in their daily lives. And many fear that the United States will end its longstanding “wet foot, dry foot” policy granting legal residency to Cubans who manage to reach land in the United States. Even though the policy is codified in a 1995 law the Obama administration is not presently proposing to amend, the fear has induced a new exodus in recent months. Some 40,000 Cubans have attempted a dangerous journey through Central America to reach the southern border of the United States. DeLaurentis responds to my question about reasons for the exodus by saying simply that emigrants are “looking for better opportunities elsewhere.” He adds: “We want legal and orderly immigration.”

The ultimate hope, both in Havana and Washington, is that Cuban life will improve enough to induce ambitious and restless young citizens to remain in their country. But the evidence suggests its fulfillment may be a long time coming.

Top photo: Flickr user halbag

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A Great Print Run

Timothy B. Clark — Tue, 17 Nov 2015 14:55:00 -0500

There’s nothing quite like a magazine—with its text and headlines and photos and charts and graphs and sense of humor—to tell a story. Government Executive has been doing that for decades. Now, with the last issue of the print magazine, we’re moving ahead into the digital-only age.

So it seems the right time to reflect on what we’ve done since we acquired the magazine in 1987. I took over then as editor for two decades, before handing the reins to Tom Shoop in 2007.

Ever since Government Executive began in 1969, with Richard Nixon on its cover, advertising revenue has been its lifeblood. Federal managers and executives, and senior military officers, received the magazine at no charge. Eventually, we gained 75,000 subscribers and estimated that about 350,000 people read each issue.

At one point, we produced 22 issues a year. The number gradually declined to six a year as readers’ attention and advertising dollars shifted online.

To serve the demand, we moved ahead with strong and diversified digital efforts. We began with the launch of GovExec.com in 1996, and later created online publications on technology (Nexgov), national security (Defense One), and state and local government (Route Fifty).

Shaping Perceptions

Magazines shape people’s perceptions of the topics they cover. Federal officials work in specialties that don’t always provide a broad perspective on the government at large. But we have done that for them.

Our analysis was often more credible than official pronouncements from on high. The White House or Office of Management and Budget could undertake yet another management or reform initiative, and paint rosy portraits of progress, but we would cast an independent eye and tell it like it was.

In one memorable example, we declared in October 1989 that Washington was running a “Hollow Government.” The cover depicted a flimsy house of cards, and the tagline read: “The incapacitating consequences of continuing austerity.” Staff writer Mark Goldstein found case after case of agencies’ inability to fulfill their missions. The “Hollow Government” phrase became part of the public administration lexicon, used often in subsequent scholarly studies.

Austerity was a continuing theme deep into the Clinton administration and beyond. For our March 1996 cover, we photographed a rented chainsaw alongside an ax, a meat cleaver and three knives, to emphasize the prospect of deep budget reductions.

This was two years after Newt Gingrich and his Contract With America had led Republicans to their first majority in the House in many years. We had fun with the Gingrich revolution. In January 1995, our cover depicted Gingrich with a king’s crown on his head, and our headline read: “Royal Flush: Shrinking government is the game, and Newt Gingrich holds the high hand.”

We didn’t really think Gingrich could wave his hand and eliminate big government. The May 1995 cover made the point with a tombstone engraved, “Big Government, 1932-1995, R.I.P.” From the grave itself a ghastly hand emerged to suggest that big government was, as our headline pronounced, “Not Dead Yet.”

Then, in 1996, President Clinton declared that “the era of big government is over.” We remained skeptical. To be sure, he was shrinking the bureaucracy, reaping the dividends of the Cold War’s end. At the same time, he was an outsourcer. In June 1995, our cover showed a space shuttle with a “For Sale” sign on its windshield, and our May 1999 cover depicted an apple chewed “Down to the Core” as the Pentagon targeted 230,000 jobs for “auction to the lowest bidder.”

The number of federal employees was a key measure Clinton and other politicians used to gauge the size of government, and they worked to keep the head count down. But full-time federal positions weren’t a good indicator, we concluded in a 1999 cover story. Titled “The True Size of Government,” the article by public administration scholar Paul Light put the number of jobs created by federal grants, contracts and mandates at 12.7 million—far outstripping the 4.3 million civilian, military and postal service jobs on the official federal payroll.

Focusing on Management

True to our mission as “government’s business magazine,” we devoted a lot of ink to the management imperatives of federal agencies. The topics were endlessly interesting.

How did the Defense Department meet huge organizational challenges? Could the 22-agency merger that created the Homeland Security Department possibly work? How did NASA approach its goal of sending astronauts to Mars? Was Customs and Border Protection properly organized to control the nation’s borders?

Could the Education Department
really make a difference with new mandates like No Child Left Behind? Were federal emergency management personnel up to tackling emergencies like hurricanes Katrina and Sandy? How could government quickly—and responsibly—spend more than $800 billion in anti-recession stimulus funds? What could be done about rampant fraud and abuse in entitlement programs? Were the feds treating wounded warriors as they should? How were women faring in the civil service and the military? Could agencies cooperate to effectively implement the complex
Obamacare health reform law?

Although managing the bureaucracy isn’t at the top of any president’s priority list, each feels compelled to have a management agenda. One that enlisted a lot of civil servants was the Clinton-era National Performance Review, led by Vice President Al Gore.

When the NPR wanted to hold a gathering of federal “reinventors” from around the country, we stepped in to help. The first Reinvention Revolution conference was held in 1996. That was the beginning of a long-running series of (renamed) Excellence in Government annual events—some running three days and attracting hundreds of attendees.

Our role in these events fortified our position as “the communications hub of the good government community,” as I liked to say. We worked closely with the Council for Excellence in Government, and were founders, with the Partnership for Public Service, of the Service to America Medals program honoring high-achieving feds. We sponsored many other awards programs to recognize best practices in technology, travel management, procurement and more.

The quality of our journalism gave us standing to undertake a rigorous program to evaluate federal agencies’ performance. Paul Light, then an executive with the Pew Charitable Trusts, in 1997 proposed that we undertake the Federal Performance Project in cooperation with leading public administration scholars, first from Syracuse University and later from The George Washington University. In this four-year undertaking, led by then-Deputy Editor Anne Laurent, we rated more than 30 federal agencies on their management capacity.

Lifting the Fog

In the end, it’s always been about the bureaucracy. We’ve shown it respect, poked fun at it, and felt the pain of readers lost in its maze.

I used to call myself the “Boswell of the Bureaucracy,” and once penned this stanza to describe our work:

In the land of GovExecu,

By the bureaucratic bog,

Lived a band of magaziners

Lighting up the murky fog.

We’ve used the term “bureaucrat” sparingly, and have taken pride in counting nearly all of the Senior Executive Service as subscribers. But we have focused on many of the bureaucracy’s problems.

In January of this year, against a red-tape backdrop, our cover proclaimed: “Can’t Hire; Can’t Fire: Other than that, everything’s great with the civil service system.” We won a Jesse H. Neal Award from American Business Media for our late colleague Bob Brewin’s reporting on the poor treatment of wounded warriors returning from Iraq and Afghanistan.

We also celebrated bureaucratic triumphs. In November 1990, we put all hands on deck to document the incredible logistics effort that preceded the U.S. victory in Operation Desert Storm. James Kitfield, won the Gerald R. Ford Award for Reporting on National Defense for that effort.

We made other deadline dashes. In September 2001, we threw our October issue plan out the window to report on agencies’ response to the World Trade Center and Pentagon attacks. In October 2005, six writers contributed to a special report on Hurricane Katrina and its effects on government at all levels.

We continue to win awards, including a Neal Award last fall for “Crime Scene,” Kellie Lunney’s investigation of law enforcement on Indian reservations.

Many people contributed to the success of the magazine over the years—
editors, correspondents, designers, advertising sales representatives, marketing experts and more. Some, such as Deputy Editor Katherine McIntire Peters and Managing Editor Sue Fourney, have been with us for two decades or more.

Along the way, we’ve always enjoyed the strong support of our owners, both at National Journal Group, led by John Fox Sullivan, and later under the umbrella of David Bradley’s Atlantic Media Company.

I hope we can do our audience proud as we march toward our digital-only future.

Tim Clark, editor at large, was editor in chief, publisher and president of Government Executive. He also is co-founder of National Journal, a sister publication, and a fellow of the National Academy of Public Administration.

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Why Government Fails So Often

Timothy B. Clark — Wed, 16 Jul 2014 16:00:00 -0400

Public administration scholars often write about what’s working in the public sector, hoping to help people who work for government agencies improve their programs’ performance.

As government has grown, another strain of writing has emerged, devoted to analyzing public sector failures and their causes. Eric Patashnik’s 2008 book, Reforms at Risk and Phillip Howard’s The Rule of Nobody, published earlier this year, are two examples, as is a new paper by Paul Light, a professor of public service at New York University. They are now joined by another volume straightforwardly titled Why Government Fails So Often and How it Can Do Better by Peter H. Schuck, an emeritus professor of law at Yale University who worked for the now defunct Department of Health Education and Welfare during the Carter administration.

Schuck’s book includes a chapter about federal programs he deems successful, and a chapter about the civil service, but most of his analysis focuses on programs that could be seen as failing. The dozens of domestic programs he covers serve the interests of some, he acknowledges, but often inefficiently, and with unintended consequences, and at immense cost. Schuck advocates incremental change to improve government performance.

It is a timely book in light of the steep declines in the public’s regard for government, a Congress that is increasingly hostile to federal programs, and a civil service whose morale keeps sinking lower with every survey. Schuck’s analysis helps explain why the government is so reviled and thus helps us think about remedial steps and the kinds of policies that should be avoided in the future.

The very size of government doubtless contributes to the public’s skepticism. Its spending has reached $3.8 trillion. The $3 trillion we spend on domestic programs is consuming the highest share of gross domestic product since the end of World War II. With food stamps and unemployment insurance and Social Security and health programs running at record levels, more Americans are receiving entitlements than ever before. Tens of millions are dependent on such programs for the essentials of life: food, shelter and basic health care among them. The government now backs 90 percent of new mortgages, more than before the financial crisis, and nearly 100 percent of student loans. Yet it’s clear that government has not (perhaps cannot) cure many problems that afflict us, Shuck writes, including “an embedded underclass, weak family structures, fiscally unsustainable entitlement programs, persistently mediocre (or worse) elementary and secondary education, growing inequality, a deteriorating infrastructure.”

High spending and inefficient regulation threaten future economic growth, Schuck argues. And low public esteem compromises the government’s “legitimacy,” he writes. As Philip Howard also observes in The Rule of Nobody, citizens who don’t particularly trust government aren’t of a mind to give it the power and resources that would enable successful, effective programs. In one example, more than four years after enactment of the Affordable Care Act, many states continue to resist the new law, opting not to establish insurance exchanges or to adopt Medicaid reforms that would enroll millions of uninsured people.

Shuck writes interestingly about the problem of “moral hazard” in programs that seek to manage risks. Incentives in such programs tempt people to take on more risk because they know that others will bear the costs if the bet goes sour. Federal flood insurance is a familiar example, blamed for costly building and rebuilding in vulnerable flood plains. Moral hazard characterized the Fannie Mae and Freddie Mac housing loan programs, whose guarantees tempted lenders to make risky subprime mortgages (with taxpayers ultimately left holding the bag). The Federal Housing Administration is now replicating the problem. The Pension Benefit Guaranty Corporation sets pension plan insurance premiums too low to cover the true risks of default, tempting companies to shift their obligations to the agency, which now has a deficit exceeding $25 billion. The Affordable Care Act creates moral hazard with its lenient treatment of young people who don’t sign up until they’re sick. Drought insurance programs costing billions guarantee farmers a portion of their projected income, rather than simply paying them for damaged crops, tempting many to buy more coverage, and providing more income than they would earn with healthy crops. Shuck writes that “moral hazard is common in government programs targeted at the poor, as one usually can receive benefits only by remaining poor.”

The student loan program “is an engine of moral hazard,” Schuck writes. Debt in the program now exceeds $1.2 trillion, and more than $75 billion is in default. Student borrowers have few assets, aren’t asked for collateral or evidence of ability to repay. Delinquency rates are the highest of any federal program, reaching 11 percent in 2012. And the program appears to have contributed to the tripling of tuition and fees in the past 20 years—since student borrowers can now “afford” to pay more.

Of course, implementation of ambitious programs is often fraught with difficulty. The Affordable Care Act is the latest example. Schuck focuses on the many programs (including the ACA) whose success depends on effective cooperation from many different actors who often have inconsistent perspectives on the program, and the power to make decisions affecting it. The complexity of reaching agreement often produces delays that can “defeat, deform and sap a program,” Schuck writes. Apparent waste of huge amounts of money in Afghanistan and Iraq are one well-known example, but Schuck sees comparable problems in many U.S. jurisdictions.

Writing about structural impediments to successful regulatory programs, he observes that markets are so powerful “that they tend to resist, distort, override and marginalize” well-intentioned policies. Expansion of government regulation, he writes, has fed development of the underground economy, now estimated at about $2 trillion in income unreported to the Internal Revenue Service, and growing apace.

Analyzing policy successes, Schuck credits Social Security, food stamps and the earned income tax credit as effective anti-poverty programs. The G.I. Bill, the interstate highway system, the Voting Rights Act and the Immigration and Nationality Act of 1965, airline deregulation in the late 1970s, the Welfare Reform Act of 1996 and the National Institutes of Health, all make his list of programs that have contributed to the national welfare.

Programs big and small, with varying records and often under attack from the right, are managed by civil servants and their armies of contractors. They continually seek better performance and greater efficiency, but improvements come mostly at the margins. So, writes Schuck in a glum passage, the federal workforce is “demoralized, poorly equipped, marginalized, publicly scorned and [literally] undisciplined” because it is so difficult to suspend, demote or fire a poor performer. Still, he dedicates his book to “our federal officials—civil servants and political appointees alike—who struggle against great odds to make our government work.”

Schuck suggests a few useful steps for incremental reforms, but the importance of his book lies in its analysis of why domestic programs falter—comprehensive and compelling, timely and important for those who care about government’s performance and reputation.

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The Rule of Nobody: When Leaders Can’t Lead

Timothy B. Clark — Fri, 06 Jun 2014 12:13:43 -0400

Recent polling of the federal workforce suggests that morale is worse than ever. Limits on pay increases, furloughs, and the generally negative tone pervading political and media discussions of agencies and their employees surely contribute to the gloom.

But perhaps there’s another side to civil servants’ discontent: their inability to take risks, make decisions outside of strict norms, to make a difference in progress toward the common good. Perhaps they feel caught in a spider’s web of complex and detailed laws and regulations.

Analysts for centuries have perceived bureaucracies as slow, inefficient and impermeable to change. This picture emerges again in a new book from Philip K. Howard, an iconoclastic thinker and activist on improving government in the United States. Its title, The Rule of Nobody, suggests his provocative thesis: that the United States suffers not from overweening government authority but from a deficit in power to take action on issues large and small.

Howard is a lawyer, a partner at Covington and Burling in New York, versed in legal theory and with a fine appreciation for the unintended effects of accumulating law and regulation in our country--an accretion that increasingly deprives officials of the power to decide.

In all, Howard calculates, the federal government has produced 100 million words of binding law and regulations, and state and local regulators another 2 billion. And there’s little effort to make sure new initiatives fit with the old, or to discard outdated programs and rules. It’s like accumulation of sediment in a harbor, as Howard observes.

Who can understand the Affordable Care Act, whose 2,700 pages have spawned many more thousands of pages of regulations? How can banks, even with armies of lawyers, comply with the Dodd-Frank law on banking oversight, whose regulatory juggernaut has produced more than 1,000 pages just to implement what was intended as a simple dictate banning proprietary trading? The complex Medicare program is getting ever more complex, with its reimbursement categories set to increase exponentially next year, to well over 100,000.

Regulatory regimes go too far. Hemmed in by rules, teachers in the classroom can hardly discipline unruly students, cannot pat someone on the back for a job well done, and in many cases are confined to teaching to the test. It’s little wonder that parents are deserting public education for private, as in New Orleans whose school system has just converted to an all-charter model. The nursing home industry is cited as also suffering from excessive regulation, with highly detailed, prescriptive rules taking most of the soul out of caregiving.

Desperately needed infrastructure in this country is often held up because so much permitting is required and no one is empowered to give the go-ahead. A project to raise the roadbed on the Bayonne Bridge in New Jersey, key to keeping the port in business in the new era of global supertankers, is a leading example. Even President Obama, with a designation of the bridge as a key infrastructure project, could not definitively get through the thicket of reviews (resulting in 47 permits) and lawsuits holding up its progress. It’s a classic case of the Rule of Nobody.

Howard laments the condition of people whose jobs in government don’t come with the authority to make things happen. “People lose their energy when they’re forced to trudge through life just doing what they’re told,” he writes. “Centralized legal dictates make people go brain dead. People not only don’t have fun, but don’t get much done. That’s what’s happened to government employees.”

So what can be done? Howard has a sweeping vision of reform, encompassing simplification of regulatory regimes, more reliance on officials’ sense of what is right in particular circumstances, and less rote judicial review.

He suggests that Congress appoint special “spring cleaning” commissions to help recodify the law in many fields, such as education and infrastructure approval. Looking forward, he proposes that all laws with budgetary impact automatically expire after 15 years. He suggests steps to enhance presidential authority, including more latitude to deal with personnel and other management issues. To expedite decision-making, Howard would construct limits on people’s ability to bring suit without first showing illegality or abuse of discretion.

Finally, Howard makes a powerful case for institutionalizing a system of citizen oversight of the federal government. He notes that civic groups in places like New York City have attained reputations for independence, and thus the moral authority, to speak out effectively for the public good. It’s happened in Washington too from time to time. In 2010, for instance, former Sen. Alan K. Simpson, R-Wyo., and former White House chief of staff Erskine Bowles, who was president of the University of North Carolina system after serving as President Clinton’s chief of staff, teamed up to analyze the country’s fiscal issues. Their credibility ensured that the Simpson-Bowles Commission’s report would become a vital part of the ongoing debate about controlling deficit spending.

A new group, perhaps called the Council of Citizens, would be composed of distinguished citizens without regard to partisan affiliation. It could gain the moral authority to advocate long-range actions of benefit to the nation and to critique those who would “saddle society with long-term costs for short-term political gain.”

This ambitious vision might require, in Howard’s estimation, five new constitutional amendments. That is a heavy lift, but who knows, a principled appeal might form the basis for a political movement strong enough to turn another page in our evolving system of government.

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Rebuilding Public Trust

Timothy B. Clark — Fri, 15 Nov 2013 00:00:00 -0500

Paul A. Volcker already has an unmatched legacy of public service, but at the age of 86 he is tackling one more big problem: the reputation of government in the United States.

For advice on this intractable problem, he convened about 50 practitioners and professors of government in late September at the grand old Schloss Leopoldskron in Salzburg, Austria, site of the long-running Salzburg Global Seminars on world issues.

Dozens of ideas surfaced during the three days of talks aimed at helping the former Federal Reserve chairman frame an agenda for the Volcker Alliance he has recently created—an organization whose small staff will seek partners to help improve government and its repute. The staff is led by Shelley H. Metzenbaum, who was a top official at the Office of Management of Budget until earlier this year.

Overshadowing the gathering was deep concern about the continuing steep decline in citizens’ respect for their governments. A stark worldwide view was offered by Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, whose 34 member countries span the globe. “The effects of the financial crisis have increased distrust in governments, to the point that we are witnessing a major fracture in the social contract,” said Gurria. “The authority of governments and their ability to deliver are in question.”

Should the new Volcker Alliance make some sort of frontal attack on the issue of trust? At the Salzburg forum, I suggested
that citizens’ regard for government might be improved if public officials and influencers spoke more clearly about its missions—fighting poverty, improving health, fostering science and innovation, battling corruption and crime by enforcing the laws, reducing pollution, securing the nation. But for all his stature, Volcker probably cannot command a large enough stage to directly influence public opinion about government. Most delegates said the group should focus on improving execution of existing programs. This was Volcker’s instinct as well. He emphasized Thomas Edison’s aphorism: “Vision without execution is hallucination.”

Ideas for improving execution of the laws were manifold. One former Senate staffer suggested a “front-end” fix: including best-practice implementation provisions in laws creating new programs or fixing old ones.

Many delegates observed that government is running far behind the private sector in providing online services that fully satisfy users. Former Housing and Urban Development Secretary Carla Hills, who also served as U.S. trade representative, cited United Airlines’ practice of asking fliers for immediate feedback on their satisfaction, and its use of that data to improve service. Federal agencies can find it considerably more difficult to solicit such feedback, since information collection initiatives are strictly regulated
under the Paperwork Reduction Act.

Clearly, technology solutions can work to great effect, as demonstrated in Boston’s public school choice program. Boston officials cloaked their system in such dense bureaucratese that parents could not easily make well-informed choices. Then a nonprofit called Code for America dispatched a team to invent a website that made school comparisons and choices much easier. About half the city’s parents now use the Web service, and without question it has improved their interactions with government.

That’s one example of improving performance, which Volcker and others see as essential to improving trust. Sir Michael Barber, who was the British government’s chief performance officer from 2001 to 2005, said that while most politicians think the relative importance of policy and implementation is 90-to-10, in reality it’s the reverse.

Volcker’s new effort is called an alliance because its success will depend on creating a network of people and institutions that support his essential goals. Many are likely to respond to his call.

The alliance may lead efforts to collect and disseminate best practices across a variety of government activities. One suggestion focused on developing models for public-private partnerships to address societal needs, including the kinds of partnerships gaining traction here and abroad to finance, construct and operate major infrastructure projects. The Alliance might also support new research, and aggregation of existing research, about public administration best practices, suggested academic leaders who came to Salzburg.

As the Salzburg meeting came to a close, Volcker suggested that the alliance’s goal, and perhaps its slogan, should be to “make government work better.” He talked about reorganizing where needed, in particular among federal agencies responsible for oversight of financial institutions; measuring performance against goals; developing public-private partnerships; and helping with education and research. One can hope that this distinguished man’s work to improve government’s performance and reputation meets with the success it deserves.

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Analysis: Plummeting Public Trust Is a Global Problem

Timothy B. Clark — Tue, 08 Oct 2013 10:53:18 -0400

Paul A. Volcker already has an unmatched legacy of public service, but at the age of 86 he is tackling one more big problem: the reputation of government in the United States.

To solicit expert advice on this intractable problem, he convened about 50 professors and practitioners of government in late September at the grand old Schloss Leopoldskron in Salzburg, Austria. The ancient manor house is site of the long-running Salzburg Global Seminar series of meetings addressing economic, societal and other world issues.

Dozens of ideas were surfaced during the three days of talks, and many insights were gleaned about topics including the state of public management education, hiring in the federal government and public-private partnerships. The objective was to help the former Federal Reserve chairman frame an agenda for the Volcker Alliance he has recently created -- an organization whose small staff will seek allies, or partners, to help improve government and its repute. The staff is led by Shelley H. Metzenbaum, who was a top official at the Office of Management of Budget until earlier this year.

Overshadowing the gathering was deep concern about the continuing steep decline in citizens’ respect for their governments. Alan Murray, new president of the Pew Research Center, documented the decline in the United States with data showing that only about 20 percent of Americans trust the government to do the “right thing” most of the time.

It’s a worldwide problem. The view from abroad was starkly described by Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, whose 34 member countries span the globe. “The effects of the financial crisis have increased distrust in governments, to the point that we are witnessing a major fracture in the social contract,” said Gurria. “The authority of governments and their ability to deliver are in question. Public trust is one of the most precious assets that our societies have; it is the cornerstone of effective governance, the main ingredient to promote economic growth and social progress. Like never before, our countries are running dry of this precious asset. Like never before, our citizens have doubts about their government’s capacities to make the right decisions. And like never before, we need to roll up our sleeves and take the necessary measures to recover that confidence.”

Declining trust limits the latitude governments have to undertake new programs, to reform existing programs and even to shore up troubled economies. It also saps citizens’ willingness to pay taxes, delegates observed. Resistance to higher taxes is strong in the United States but even stronger in places like Greece -- where evasion and avoidance of relatively high tax levies are common.

So should the new Volcker Alliance make some sort of frontal attack on the issue of trust? When it came my turn to speak in Salzburg, I argued that public officials (and the media) don’t clearly convey public sector goals and achievements. Citizens’ regard for government might be improved if officials spoke more clearly about its missions -- fighting poverty, improving health, fostering science and innovation, battling corruption and crime by enforcing the laws, reducing pollution, securing the nation. In the interest of tempting more smart young people to work in government, leaders could also convey a sense that government is engaging emerging issues: education demands, water and energy shortages, immigration and assimilation challenges, and demographic trends that threaten social safety nets and raise generational equity issues.

For all his stature, though, Volcker probably cannot command a large enough stage to directly influence public opinion about government. Most delegates said the group should focus on improving execution of existing programs. That was clearly Volcker’s instinct as well -- he emphasized Thomas Edison’s aphorism: “Vision without execution is hallucination.”

Ideas for improving execution of the laws were manifold. One, offered by a participant who served as a senior staff member for several senators during her 25-year career, would seek a “front-end” fix by including best-practice provisions in laws creating new programs or fixing old ones. The right kinds of guidance for differing kinds of laws and programs could be identified through academic research, she suggested.

Although there were few technologists in the group, many delegates observed that government is running far behind the private sector in providing online services that fully satisfy users. Former Housing and Urban Development Secretary Carla Hills, who also served as U.S. trade representative, cited United Airlines’ practice of asking fliers for immediate feedback on their satisfaction, and its use of that data to improve service. Some state and local governments are similarly collecting citizens’ reactions. Federal agencies can find it considerably more difficult to solicit such feedback, since information collection initiatives are strictly regulated under the Paperwork Reduction Act.

Still, technology solutions can clearly improve citizens’ experience with government. A terrific example involving the Boston public school system was described by Catherine Bracy, an executive with Code for America, whose purpose is to help the public sector find high-tech solutions. Boston officials moved to a school-choice policy, but cloaked their system in such dense bureaucratese that parents could not easily make well-informed choices. Bracy’s colleagues devised a website that made school comparisons and choices much easier. About half the city’s parents now use the web service, and without question it has improved their interactions with government.

So that is an example of improving performance, which Volcker and others see as essential to improving trust. Sir Michael Barber, who was in effect the British government’s chief performance officer as head of the Prime Minister’s Delivery Unit from 2001 to 2005, said that while most politicians think the relative importance of policy and implementation is 90-to-10, in reality it’s the reverse. As many OMB-led efforts to boost performance have shown, it’s impossible to simultaneously improve thousands of federal programs, and Volcker seems intent on focusing on a few important activities. One of particular interest to him is the poorly organized federal approach to financial regulation, now in the hands of at least half a dozen agencies.

Volcker’s new effort is called an alliance because its success will depend on creating a network of people and institutions that support his essential goals. His name is a valuable commodity, really a brand, and his reputation so good that many are likely to respond to his call. At the conference, participants recognized the value of the Volcker name, and the need to use it with care. Several suggested such ideas as a “Volcker Index” of international corruption and a “Volcker Prize” for meritorious activities.

The alliance may well sponsor efforts to collect and disseminate best practices across a variety of government activities. One promising suggestion along these lines was focused on developing more public-private partnerships to address societal needs. In particular, some participants said the alliance could focus on the kinds of partnerships gaining traction here and abroad to finance, construct and operate major infrastructure projects. Sarah R. Wartell, president of the Urban Institute was among them, saying that government by itself will never find enough money to meet the country’s infrastructure needs.

Paul Light, professor of public service at New York University and a consultant to Volcker, suggested the alliance sponsor the creation of a database bringing together the best academic research on public management. It’s surprising that such an aggregation doesn’t exist, and its absence may suggest a weakness of the public administration academic world. Indeed, the Volcker gathering witnessed substantial hand-wringing about the state of public administration education, its lost prominence at the nation’s leading universities, and the field’s inability to attract top students. More young people are interested in “public policy” than in “public administration,” participants said. Moreover, many are less inclined to put their graduate education to work in government than in nonprofits they believe can be more effective in promoting societal change.

Among leading deans and professors at the meeting were Francis Fukuyama of Stanford University, Donald F. Kettl of the University of Maryland, Thomas Kolditz of the Yale School of Management, Steve Kelman of Harvard’s John F. Kennedy School of Government, John Graham of Indiana University’s School of Public and Environmental Affairs, Susan L. Marquis of the Pardee RAND Graduate School, Cathy E. Minehan of the Simmons College School of Management and James Steinberg of Syracuse University’s Maxwell School.

As the Salzburg meeting came to a close, Volcker suggested that the alliance’s goal, and perhaps its slogan, should be to “Make Government Work Better.” He talked about reorganizing where needed, measuring performance against goals, developing public-private partnerships, and helping with education and research. But a formal statement of his organization’s plan of action awaits more work by him and his advisers. One can hope that this distinguished man’s work to improve government’s performance and reputation don’t end up like the efforts of Russian reformer Viktor Chernomyrdin -- the prime minister who British chief performance officer Barber quoted as saying: “We tried to do better, but everything turned out as usual.”

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Enterprise Leadership

Timothy B. Clark — Thu, 01 Aug 2013 01:00:00 -0400

For 35 years, American University’s School of Public Affairs has conferred a public service award named after the late Roger W. Jones, an exemplary civil servant who helped lead the Bureau of the Budget in the 1940s and ’50s.

As a judge in the awards program, I have learned about many federal officials who have played essential roles in their agencies and the life of our nation.

Among this year’s nominees for the Roger W. Jones Award for Executive Leadership is a naval weapons research specialist who has made a huge contribution to building systems crucial to national defense, and another Defense Department executive who’s led development of high-tech training programs that have cost-efficiently prepared forces for deployment to Iraq and Afghanistan. There’s the Ph.D. economist who is a leading expert on analysis of the effects of mergers on the American consumer, and a masterful mediator whose skills were critical to saving this year’s National Hockey League season. Nominees also include the Health and Human Services Department lawyer who expertly defended Obamacare against legal attack, and a top behavioral scientist in the field of drugs and mental health.

All of these stars in the federal firmament perform at the highest levels in and sometimes outside their agencies.

In a world where the most pressing problems cannot be solved from the confines of agency silos, the people who make their mark are those who grasp the larger environment and recognize that they must seek help even from stakeholders with whom they have precious little sway. Some of the nominees operate in diffuse worlds: a regional Social Security official who has struck alliances with many other agencies, outside groups and even rock and roll legend Chubby Checker to promote health programs and other services among vulnerable populations; and an intelligence official who has contributed to making the sum of his community greater than its manifold parts.

The importance of looking beyond one’s own backyard, of peering around corners to discern what’s not obvious, is of particular importance in the national security realm. Key influencers, such as parents and teachers, are increasingly inclined to recommend against military service. The military still ranks among the most respected American institutions, but its favorability ratings took a precipitous nine-point drop with revelations of sexual harassment. The climate of public opinion is not readily influenced by the military brass, and they’re concerned about its effects on recruitment.

Many public problems are similarly beyond any institution’s control. And that puts a premium on people with the skills to reach across public and private boundaries in pursuit of common goals. A new book from the Brookings Institution coins a phrase to describe such talent: “enterprise leadership.”

The authors, Jackson Nickerson and Ron Sanders, observe that federal agencies are “cylinders of excellence.” Many address problems that range beyond their own cylinders, yet cannot find a leader—even the president—to dictate either the means or outcomes. A few steps have been taken to broaden the horizons of federal leaders, notably joint duty requirements in the military and the intelligence community. These address the need for interagency collaboration. But little has been done to prepare them for dealing with the mix of state and local government, nonprofit and for-profit organizations, and sometimes international players essential to finding comprehensive approaches to challenges like poverty, hunger, deficient health outcomes, natural disasters and terrorism. The Senior Executive Service has done a poor job of offering opportunities for such learning, an Office of Personnel Management official suggests in one chapter of the book.

Perhaps the real leaders in addressing societal issues are not in Washington. More and more they’re found in local government. They are people like Mayor Michael Bloomberg of New York, Mayor Rahm Emanuel of Chicago and intergovernmental planner William Stafford of Seattle, who see federal programs as but one part of a mosaic of efforts needed to improve the lives of citizens.

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An Allied Salute

Timothy B. Clark — Mon, 01 Jul 2013 00:00:00 -0400

Europe seems a world away to many of us, but during a visit in late May I found continuing affection for Americans and gratitude for what we have done over the past 100 years to preserve European liberty.

That sentiment is especially strong in regions like the Somme, north of Paris, where U.S. military cemeteries provide the final resting place for thousands of Americans who lost their lives in two world wars.

The World War I battlefields in northern France are not as well known today as those of World War II along the
Normandy coast. But they are as spare and elegant, with their long rows of white crosses and stars of David on meticulously kept green lawns. They exude a spirit of light and even optimism—as befits the cause for which we fought. “The hallowed graves here and at countless cemeteries worldwide remind us that freedom is not free,” said U.S. Army Brig. Gen. Bruce G. Crawford at a moving May 26 Memorial Day ceremony at the Somme American Cemetery. Crawford led a contingent of military personnel detailed to honor the American dead, traveling six hours from the American base in Wiesbaden, Germany.

The celebration at the cemetery in the town of Bony brought together an interestingly diverse cast of participants. A full French military band was present, with two dozen musicians. From Wiesbaden came a color guard of five men in dress uniform. On their own time, six other American soldiers in fatigues showed up from the storied 28th Infantry Regiment—the first U.S. detachment to see action in World War I, whose valor gave the allies confidence that brand-new troops could hold the line against the Germans. As if newly off the ancient battlefield was a cast of 15 re-enactors—French men and women dressed in American uniforms of World War I. Two local mayors and representatives from Canada and Germany were among those who laid 18 wreaths in front of an imposing memorial structure.

The American contingent was much reduced from earlier years, reflecting our drawdown of forces in Europe and the effects of budget sequestration. The official military delegation numbered only about 10, down from more than 60 in 2011. This year, no seven-man detail was there to fire a 21-gun salute. For many years, the Air Force sent four aircraft to fly a missing-man formation, but this year, the flyover was performed by two French Mirage jets.

Nonetheless, Eric E. Barker of the American Battle Monuments Commission, who is superintendent of the Somme American Cemetery, coordinated a moving ceremony along with James W. Gerard, an officer of the American Overseas Memorial Day Association, who served as master of ceremonies. The association provides an American flag for every American military grave in Europe each year and wreaths at each of the official cemeteries. Gerard has helped preside over the Somme ceremonies since 1987, when he inherited the role from his late father, a general officer in World War II, who took on the Somme Memorial Day assignment in 1964. It is an unusual father-to-son continuity that’s embraced by local French officials who also embrace the memory of heroes who gave their lives for liberty—men like Frank J. Murphy, a horseshoer; Henry Walter Miller, a wagoner; and John W. Thomas, a base hospital cook, all of whom died in 1918.

Gerard and the association put on a vin d’honneur (a toasting ceremony) in the municipal square of Vendhuile after the ceremonies—champagne, Coke and grilled sausages for what seemed the entire town. Thirty young school children sang patriotic songs, and our small American contingent mingled with the usual local officials in a wonderful tableau of international friendship.

As the day ended, I reflected that our government’s investment in the work of the battle monuments commission remains important even as defense budgets are under the knife. Maintaining 24 American cemeteries and 25 other memorials in 15 countries, the commission pursues the vision of its first chairman, Gen. John J. Pershing, commander of American Expeditionary Forces during World War I, who promised that “time will not dim the glory of their deeds.”

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Analysis: Remembering Our Sacrifices in Europe

Timothy B. Clark — Fri, 31 May 2013 17:00:00 -0400

The World War I battlefields in northern France are not as well known today as those of World War II along the Normandy coast. But they are as spare and elegant, with their long rows of white crosses and stars of David on meticulously kept green lawns. They exude a spirit of light and even optimism -- as befits the cause for which we fought. “The hallowed graves here and at countless cemeteries worldwide remind us that freedom is not free,” said U.S. Army Brig. Gen. Bruce G. Crawford at a moving May 26 Memorial Day ceremony at the Somme American Cemetery. Crawford led a contingent of military personnel detailed to honor the American dead, traveling six hours from the American base in Wiesbaden, Germany.

The celebration at the cemetery in the town of Bony brought together an interestingly diverse cast of participants. A full French military band was present, with two dozen musicians. From Wiesbaden came a color guard of five men in dress uniform. On their own time, and with families along, six other American soldiers in fatigues showed up at the ceremonies. They were from the storied 28th Infantry Regiment -- the first U.S. detachment to see action in World War I, whose valor gave the allies confidence that these brand-new troops could hold the line against the Germans. As if newly off the ancient battlefield was a cast of 15 re-enactors -- French men and women dressed in American uniforms of World War I. Two local mayors, and a sous-préfet from the national government, and representatives from Canada and Germany were among those who laid 18 wreaths in front of the imposing memorial structure where ceremonies were held.

Nonetheless, Eric E. Barker of the American Battle Monuments Commission, who is superintendent of the Somme American Cemetery, brilliantly coordinated a moving ceremony with the able assistance of James W. Gerard, an officer of the American Overseas Memorial Day Association, who served as master of ceremonies. The association provides an American flag for every American military grave in Europe each year and wreaths at each of the official cemeteries. Gerard has helped preside over the Somme ceremonies each year since 1987, when he inherited the role from his late father, a general officer in World War II, who took on the Somme Memorial Day assignment in 1964. It is an unusual father-to-son continuity that’s embraced by local French officials who also embrace the memory of heroes who gave their lives for liberty -- men like Frank J. Murphy, a horseshoer; Henry Walter Miller, a wagoner; and John W. Thomas, a base hospital cook, all of whom died in 1918.

Gerard and the association put on a vin d’honneur (a toasting ceremony) in the municipal square of Vendhuile after the ceremonies -- champagne, coke and grilled sausages for what seemed the entire town. Thirty young school children sang patriotic songs, and our small American contingent mingled with them, the local officials, the re-enactors and others in a wonderful tableau of international friendship.

The memory of their sacrifice without doubt continues to earn the friendship of the peoples of Europe.

Correction: This column has been updated to correct the location of the toasting ceremony, which was in the municipal square of Vendhuile.

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Makers, Takers, Movers and Shakers

Timothy B. Clark — Mon, 01 Apr 2013 00:00:00 -0400

The Makers and the Takers, a memorable phrase from last year’s Republican playbook, contrasted those who invent things, build businesses and create jobs with those who “take” government benefits, sometimes referred to as the 47 percent.

In politics, the Makers could also be the Movers and Shakers. They shake the money tree for the benefit of politicians aligned with their philosophical or business interests. Would-be Movers and Shakers can be found in government, especially at federal regulatory agencies and in congressional staff positions. They are learning the ropes with the goal of moving to higher-paying private posts, whence to shake agency branches with the expectation that golden apples will fall.

Money is the common thread, and a question to consider is whether amounts spent on elections, lobbying, earmarks, tax benefits and regulatory favors are so large as to cast the government into serious disrepute.

The issue was debated in Washington recently by Trevor Potter, a former Federal Election Commission chairman (and, last year, counsel to Stephen Colbert’s Super PAC) and C. Boyden Gray, who was counsel to George H.W. Bush as vice president and then president. The debate was framed around the Supreme Court’s 2010 decision in the Citizens United case, which extended free-speech guarantees to corporations that might want to voice their opinions about candidates for political office.

One may recall that President Obama called out the Supreme Court in his 2010 State of the Union address, arguing that Citizens
United “will open the floodgates for special interests—including foreign corporations—to spend without limit in our elections.” Justice Samuel Alito was seen shaking his head and, lip readers averred, whispering “not true.” With the presidential election year now history, Gray argued that the wily southern politician Haley Barbour, former governor of Mississippi, had correctly predicted there would be no flood of corporate cash.

The Super PACS, which must disclose donors, raised only 20 percent of their cash from corporations, Gray said. The big spenders in 2012 were wealthy Republicans seeking to unseat Obama, notably Las Vegas casino magnate Sheldon Adelson (backing Newt Gingrich) and conservative Christian businessman Foster Friess (Rick Santorum). After dropping tens of millions on Gingrich, Adelson declared he was in for many tens more to defeat Obama. “But none of this worked,” said Gray, discounting money as a factor.
“Adelson lost and the Republicans lost. The only real winners were the TV stations, where execs were high-fiving each other over the flow of cash all season long.”

Potter, a Republican like Gray, took the opposite view. The court strayed far from its stare decisis doctrine, Potter observed, ignoring many precedents upholding government limitations on political speech. “And they don’t even believe it themselves,” he said of the Justices’ rejection of limits on political speech, noting that many strictures are still in place: the Hatch Act for federal workers and other limits on students, prisoners, members of the armed forces, and foreign interests, the subject of an even more recent Supreme Court ruling.

Potter added that no one actually knows how much money corporations are spending on political campaigns. Groups organized under sections of the tax law that don’t require disclosure of donors spent hundreds of millions of dollars in the last election cycle, including the U.S. Chamber of Commerce, and American Crossroads and Crossroads GPS, both under the leadership of former George W. Bush adviser Karl Rove. Such a group sponsored advertisements opposing confirmation of Chuck Hagel as Defense secretary. “Who knows who’s supporting this?” Potter said.

The real problem about money and government, Gray argued, lies with regulatory agencies that are captive to the industries they oversee. The Food and Drug Administration and the Environmental Protection Agency offer two cases in which the promise of private sector employment can influence staff, he said. In particular, he pointed to a new report by the nonprofit Project on Government Oversight, arguing that the Securities and Exchange Commission suffers from such manipulation. The title tells the story: “Dangerous Liaisons: Revolving Door at SEC Creates Risk of Regulatory Capture.” The SEC, of course, disputes the thesis, saying hiring from Wall Street is the only way it can acquire the expertise to oversee complex financial shenanigans.

The problem lies not only in the agencies but also with Congress, where members and staffers routinely move to law firms and corporations doing business with government agencies. Medicare just suffered a $500 million hit—ironically in the fiscal cliff law that raised tax rates to reduce budget deficits—as a result of pressure from dozens of well-connected lobbyists for Amgen, the giant biotech firm. They won a two-year delay of Medicare
price restraints.

Unfettered campaign contributions and behind-the-scenes influence-peddling both connote a government for sale. But then, crony capitalism is what most Makers, Movers and Shakers are all about.

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FedPoem: Blimps Over Washington

Timothy B. Clark — Fri, 15 Feb 2013 17:28:38 -0500

The Pentagon plans to float two huge, helium filled “aerostats” over Washington to help guard against air attack, Reuters reports. The pair of blimps, costing $450 million, will arrive in late September. Radars will be at the center of the high-tech packages the blimps will carry, but who knows what other kinds of stuff may be on board?

Blimp Snoop

In Pakistan’s provinces, citizens groan
When constantly monitored by American drones.
Now here in D.C., we’ll see if two blimps,
Hovering and listening, can lobbyists crimp
As their pleadings they craftily hone.

Each blimp nearly football field long,
Each packed with gizmos so strong,
They’ll be snooping at will
O’er The Capital Grille,
Perhaps exposéing whate’er might be wrong.

More FedPoems here

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Regulatory Reformer

Timothy B. Clark — Fri, 01 Feb 2013 01:00:00 -0500

Sheila Bair has been hitting the airwaves of late, telling NBC’s David Gregory and other interviewers about what she learned during her five-year term as the head of the Federal Deposit Insurance Corporation.

As a high-profile warrior in the bailout wars, Bair gained notoriety that’s rare for heads of federal agencies. In 2008, Time included her in its 100 Most Influential People list and called her “the little guy’s protector in chief.” At the same time, Forbes named her the second most influential woman in the world, behind German Chancellor Angela Merkel. Bair was honored with the John F. Kennedy Profile in Courage award in 2009.

Now, she has told her story of high-stakes intrigue in Bull by the Horns (Free Press, 2012), an inside account of government’s response to the financial crisis. She was a key player, leading an agency whose deposit insurance and bank supervisory programs bolster the public’s confidence in the nation’s financial system.

Bair opposed the sweeping bailout of major financial institutions. She argued that much more should have been done to save struggling homeowners from foreclosure. Her book details internecine struggles with other powerful officials, notably Treasury Secretary Timothy Geithner, whom she roundly criticizes as the bailout king. But students of government may be more taken by Bair’s assessment of the conflicts of interest and institutional weaknesses that impede federal regulatory initiatives.

The FDIC was an agency in distress when she arrived in 2006. Beaten down by critics, downsized repeatedly and hampered by appropriators in pursuing needed rule-makings, the staff was deeply demoralized. Bair took employee surveys, upended an unpopular merit pay scheme, established the Culture Change Council and with her own flinty leadership turned the agency around. In 2011, the FDIC ranked first in the Best Places to Work survey by the Partnership for Public Service. Bair writes of her reliance on staff leaders, “top experts in the field,” who helped her develop sound positions on regulatory issues. “People frequently assume that the heads of government agencies have unfettered power to work their will,” she writes, “but the truth is that you have to have staff acceptance and support to get it done.”

Bair says the FDIC is still far from perfect, and she voices concern about the revolving door that afflicts many regulatory agencies—where employees may see their jobs as tickets to more lucrative careers in the private sector. Bair would like to see “a stronger esprit de corps” among financial regulators, hoping they might be like the Foreign Service officers who often make a lifetime commitment. Regulators should be banned from ever working for institutions they have regulated, she says, and should be better educated and continually trained. Senior staff should be rotated among the financial agencies to “help guard against regulatory capture,” Bair writes.

In her estimation, one agency that’s been ensnared by the institutions it regulates is the Office of the Comptroller of the Currency, a unit of the Treasury Department. It has proved unable to impose the kinds of requirements that would keep the big banks it oversees from getting into trouble. The Federal Reserve, too, she writes, “had its issues with regulatory capture.” Bair would abolish the OCC and merge the Securities and Exchange Commission with the Commodity Futures Trading Commission while also giving them the kind of independent funding the FDIC enjoys. She would abolish Fannie Mae and Freddie Mac, the two government-sponsored enterprises that required huge bailouts.

Bair has some choice words for Congress, “more often than not part of the problem.” Members of Congress, “fed by generous campaign contributions, as well as prospects of employment for themselves and their staffs when they leave office . . . have an interest in promoting the profitability of large financial institutions,” she writes.

The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act was just the first step in the fight to toughen regulation of Wall Street. Bair writes that players both inside and outside government are resisting rule-makings that would allow enforcement of the law. Indeed, Dodd-Frank’s longer term viability is in question, says University of Virginia professor Eric M. Patashnik, author of the award-winning book Reforms at Risk (Princeton University Press, 2008) about how major government reforms can gradually fail.

“Just as the landmark Tax Reform Act of 1986 was the victim of ‘death by a thousand cuts,’ so Wall Street interests have been seeking to carve out countless special exceptions and loopholes to weaken Dodd-Frank’s regulatory framework without having to repeal the law outright,” Patashnik says. “Nearly 500 companies, trade associations and other groups reported lobbying on Dodd-Frank in 2011. The result of this industry lobbying—and of strategic efforts to prevent key regulatory agencies from receiving needed appropriations—
has been to slow the rule-making process to a crawl, and many deadlines have been missed.”

It’s too early to know whether Dodd-Frank will be “emasculated by the very interests it is intended to regulate,” says Patashnik. But Bair, whether in government or not, will not be sitting on the sidelines of the battle to assist struggling homeowners and hold the big banks accountable for their sins.

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FedPoem: A Ball for 40,000 People

Timothy B. Clark — Fri, 18 Jan 2013 12:00:00 -0500

FedPoem: Our poet-in-residence was amused when the Obama inaugural team announced there would be only two “official” inaugural balls—one for 4,000 honoring the military, and another for 40,000 people—twice as many as can fit in the Verizon Center for a Washington Wizards game. It seemed the White House was trying to have it both ways: projecting frugality by cutting the number of balls from 10 in 2008 while at the same time selling tickets to a vast mass of dancers. The bard reached back in time for inspiration from the great Tommy Tucker, who recorded his enduring hit, “High Heel Sneakers,” in 1963.

The first verse, below, is from that song.

INAUGURAL CRUSH

Put on your red dress, baby
Ya know we're goin' out tonight
Put on your red dress, baby
Lord, we're goin' out tonight
And-a bring along some boxin' gloves
In case some fool might wanna fight

Puttin’ on my ‘rmani suit, baby,
With a finely made white tie
‘Gainst your red dress, baby,
It’s gonna look so fine
And we’ll head down to 9th Street
For the Convention Center jive.

Just forty thousand, baby
Will be joinin’ us tonight,
Such a cozy ball, baby
To toast Obama’s might!
If magnetometers clear us,
We’ll be dancin’ oh so tight.

He’s savin’ dough, sweet baby
With just one big ball tonight,
Down from ten last time, baby,
But I’m wonderin’ if it’s right
To call this thing a ball
When a mob scene is in sight. ]]>

FedPoem: Ode to the Trillion Dollar Coin

Timothy B. Clark — Wed, 16 Jan 2013 16:25:23 -0500

Editor's Note: Here's the latest from our own poet laureate of the federal world, Tim Clark. If you haven't already, be sure to check out his his first effort, on would-be Treasury Secretary Jack Lew's loopy signature.

Platinum Blues

It seemed so simple, so savvy, so smart,
Like an elegant piece of minimalist art,
Until Treasury itself conspired to enjoin
The fabulous platinum trillion-dollar coin.

Who needs Congress to fix our national debt
When the mint can fire up and quickly beget
A token that allows us to borrow more dough
So our passion for spending can continue to grow?

White House press guy Jay Carney softly demurred
When asked if the big minting might ever occur;
Columnists like Krugman, and congressmen too,
Cheered the platinum fix to our debt ceiling blues.

‘Twas too good to be true in the cold light of day:
Carney kicked the response over Treasury’s way,
Where spokesmen conceded the ceiling could shift
Only if Congress would give it a lift.

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A Poetic Tribute to Lew's Loopy Signature

Timothy B. Clark — Fri, 11 Jan 2013 13:35:40 -0500

A bit of verse dedicated to the now-infamous signature of Jack Lew, President Obama’s Treasury secretary nominee.

From Hamilton to Lew

Alexander the first must twist in his grave
To think that the dollar would be so depraved
As to feature the signature of Jacob. J. Lew
When no one comes close to guessing just who

Might scribble such squiggles and odd loop-de-dos!
Ne’er Treasury’s chief, says Alex’s muse,
And Obama, he too can scarcely believe
That his pick can’t write words that people can read.

So the Prez orders Lew to clean up his act
To penmanship school he orders him back
Clear writing means clear thinking, of that he is sure
And no Secretary of his will sign so impure!

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The Big Fix

Timothy B. Clark — Sat, 01 Dec 2012 00:00:00 -0500

If government is broken, as many believe, then what can be done to fix it?

For one wide-ranging set of answers, we can turn to the Memos to National Leaders project mounted
this year by the National Academy of Public Administration and the American Society of Public Administration to address nine key government issues, from transparency to intergovernmental relations.

Let’s start with the budgeting memos, since virtually everyone in Washington is transfixed by the fiscal cliff and the longer range problem of controlling government spending and debt. Its authors include Paul Posner, a big-picture thinker who was a top executive at the Government Accountability Office for years before becoming head of the public administration program at George Mason University. He and his co-authors note that the budget process has “virtually seized up,” with decisions chronically late each year and many programs on never-ending autopilot. Budgeting, they say, should be much more “far-sighted and strategic, more focused and disciplined.”

Many government reformers believe that budgets should be shaped around national goals and priorities. To this end, the authors suggest selected
strategic reviews of major spending and tax categories. Outside experts could help conduct these reviews, they write, as was done for years in the Brookings Institution’s now discontinued Setting National Priorities series of books.

These reviews might help the administration, in consultation with congressional leaders, focus on high-priority national objectives: a more productive labor force, greater energy independence, broad improvements in health, for example. A portfolio approach to such objectives could encompass reviews not just of spending programs but also tax expenditures, regulatory and legislative mandates, and other policy tools.

To provide a more formalized means of addressing fiscal imbalances,
the authors suggest that Congress require a presidential address, in the fall at the beginning of the federal fiscal year, on the fiscal outlook and the proposed budget’s effects on deficits and debt. As for Congress, the memos suggest limiting the extensive direction it now gives agencies about how they spend their money.

It’s also an article of faith among reformers that government is poorly organized to achieve its missions. Indeed, President Obama began, but never really pursued, a reorganization initiative and he recently opined that the government needs a “secretary of business” to oversee programs aimed at boosting the private sector.

One of the memos suggests that the president rebuild the shriveled capacity of his executive office to design reorganizations. But the more likely course would be to create more virtual reorganizations like the one that created the Interagency Council on Homelessness. Established by legislation, the council has helped focus the efforts of federal, state and local agencies, even though it has never had a presidentially appointed boss who could crack the whip. The memo suggests that Congress grant the president authority to appoint from among his agency leaders various “chiefs of national goals.” Whether this would succeed after many less-than-effective efforts to deploy White House czars and interagency councils is uncertain, of course, but perhaps it’s worth a try.

One of the most compelling memos addresses the nation’s intergovernmental crisis. It’s a cri de coeur from former Maryland Gov. Parris Glendenning and others about state and local governments’ inability to meet the challenges confronting them and the lack of true collaboration with authorities in Washington. “The crisis at its heart is the absence of adequate revenue,” they write, noting with chagrin the loss of more than 700,000 public employees during the past two years. Federal tax “reforms” could hurt states and cities—for example, by curtailing deductions of taxes paid to such jurisdictions. Health care, environmental regulation and immigration programs are among many issues demanding, but not getting, carefully designed intergovernmental policies. A useful step, the authors write, would be creation of an intergovernmental policy council.

Another memo suggests ways to strengthen the broken appointments process, which has seen many key political positions held vacant for months and allowed senators like Richard Shelby, D-Ala., to put long-running holds on nominees to secure a little more pork for their states. Its authors also would like a new presidential commission to devise a plan for reducing the number of political appointees. Other memos suggest new bureaucracies and processes for effecting change. Several propose establishing chief management officers like the one operating with a small staff at the Defense Department. One memo suggests a new office of citizen engagement to promote that goal among federal agencies. Another includes an interesting proposal to establish “public benefit corporations” to enlist private and public resources to work on infrastructure and other challenges.

So in this ideal world outlined by two distinguished public administration organizations, we’d have a better organized government with better qualified leaders focusing on the most pressing national problems and deploying federal, state, local and private resources to make a better world. And one more thing: The federal government would designate at least one big science goal: to achieve energy self-sufficiency while also protecting the world’s climate. The memos can be found at www.napawash.org.

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United We Stand

Timothy B. Clark — Thu, 01 Nov 2012 01:00:00 -0400

Soon after the fall of the Shah of Iran in 1979, an American delegation visited the region to reassure Saudi Arabia and other nearby states that the United States would stand by them as the consequences of the Iranian revolution played out. Defense Secretary Harold Brown, leading the delegation, asked Robert Murray to memorialize the outcome of his talks with the Saudis in a jointly drafted press release expressing their governments’ resolve. So the young Defense Department official spent 20 minutes with a senior Saudi official, but to no avail, as they couldn’t agree on what the release would say.

Murray remembers that when he asked why, the Saudi official replied: “Look, we are a small country. We don’t issue joint press statements with the United States. We point out our problems to you, we urge you to help, but then we fold our tents and go into the desert and wait to see the outcome.”

Now president of CNA, a nonprofit research organization involved in analysis of public issues for the government, Murray recounted this episode as we were talking about Robert Kagan’s new book, The World America Made (Knopf, 2012). His was a great parable about America’s role in the world, then and now, and it supports Kagan’s thesis that many nations want the United States engaged in their corners of the world, if not always too visibly.

President Obama has praised the book. And it seems in concert with Mitt Romney’s view of the world. So, perhaps, it may be read as a blueprint for U.S. defense and foreign policy in the years to come.

But there’s a key question: Will budgets support our sprawling military presence? Or will we demand a postwar peace dividend so large as to compromise our ability to project power around the world? Obama has said the wars’ end would help us in “nation-building at home.”

The president’s budget gives some clues. In constant 2005 dollars, defense spending peaked at an annual
rate of about $600 billion between fiscal 2009 and fiscal 2012. Once the wars are done, the budget projects that defense spending will level out at $450 billion in 2005 dollars between fiscal 2015 and fiscal 2017. That’s a considerable cut—25 percent. But it does not get us back down to levels of defense spending during the last period of peace, after the Cold War ended. In the last five years of the Clinton administration, defense spending averaged $350 billion in 2005 dollars.

So we will continue to spend at a high level. I explored some of the reasons for this during a Sept. 25
Government Executive event with Undersecretary of Defense Robert Hale, comptroller and chief financial officer of the department. Hale noted the cost of military pay has increased far faster than inflation in the past decade. That’s true too of defense-funded health care for active-duty and retired military personnel and their families—a huge budget item that’s of increasing concern to defense leaders. But the most important point is the projected budgets are geared to meet the nation’s continuing ambition to play a global role.

The Defense Department unveiled a long-range strategy in January. In an introduction, Defense Secretary Leon Panetta promised a “smaller and leaner”
military “will have global presence emphasizing the Asia-Pacific and the Middle East while still ensuring our ability to maintain our defense commitments to Europe, and strengthening alliances and partnerships across all regions.”

Kagan says it’s important to be spending enough to ensure our global reach. He observes that the era of American prominence after World War II has encouraged an unprecedented spread of prosperity, lifting billions of people out of poverty. He says the U.S. example has greatly influenced the spread of democracy—to more than 100 nations. And finally he credits American policy with preventing Great-Power warfare. In part because of America’s role, he said in a recent presentation, the world has enjoyed a 60-year “era that is extraordinarily unique.”

In summer 2011, Kagan calculated the United States had about 500,000 troops deployed overseas, including 200,000 in the two Middle East wars. The worldwide presence costs a lot of money, but helps buy us wide influence.

He asks us to consider the “costs of losing it.” We might live in a world of autocracies, not democracies. Trade routes would be less secure with reduced American naval presence. Regional wars might break out “among great powers because they were no longer constrained by the American superpower.” Finally, he says many nations, including China and Saudi Arabia, want the geopolitical stability American power promotes—as Murray had found years ago in the Saudi desert.

Kagan offers an intellectual foundation for continuing America’s policy of deep military engagement with actors around the world. Our leaders seem to agree. In late September, Obama declared, “as long as I’m commander in chief, we will sustain the strongest military the world has ever known.” Romney the same day told a veterans gathering: “I will not cut our commitment to our military.” And, in an
Oct. 8 foreign policy address Romney added: “I believe that if America does not lead, others will.”

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Budget Musings

Timothy B. Clark — Mon, 01 Oct 2012 01:00:00 -0400

With the presidential election seeming to ride on voters’ views about the size and scope of the federal government, I ran a little test this summer among highly educated people I know.

Asked what share of the U.S. workforce is represented by federal employment, one answered 20 percent. Surely it would be easy to cut jobs in such a huge cadre . . . except the real number is about 3 percent. Another believed members of Congress earn full-salary pensions after just one term in the job—a good indicator of profligate spending . . . if it were true, which it is not.

If elites don’t know much about the federal government, then the general public “is strikingly misinformed about the budget,” Wall Street Journal economics editor David Wessel writes in his new book, Red Ink (Crown Business). “The typical respondent to a CNN poll said food stamps accounted for 10 percent of federal spending; it’s closer to 2 percent.” Even harder to understand is a 2008 Cornell University poll “in which 44 percent of those who receive Social Security checks and 40 percent of those covered by Medicare say they ‘have not used a government social program,’ ”

he says. Of course, people think Washington wastes a lot of money, too: 51 cents of every dollar, according to a 2011 Gallup poll.

Against this sea of ignorance, it’s not surprising that President Obama and Republican challenger Mitt Romney have been less than honest in their portrayal of one of the biggest problems the country faces: continuing high deficit spending, borrowing and accumulation of national debt.

Romney endorsed key elements of the budget plan put together by his running mate, Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, that would erase deficit spending gradually over the next three decades. This plan features tax cuts and would pay for them through elimination of tax breaks and reductions in spending programs. The big problem is Romney and Ryan offer few specific ideas about how that might be done beyond a Medicare voucher plan that’s become a political hot potato. Analysts have concluded that cuts would be needed in popular tax breaks for homeownership and employer-provided health insurance, among others, to finance the Romney plan.

With tax increases and some spending cuts, the fiscal 2013 budget Obama unveiled last winter would, with decent economic growth, stabilize the national debt as a (high, 76 percent) share of the nation’s gross domestic product even as deficits continue. But Obama’s budget counts phantom savings from ending current wars, as if to assume those

deficit-financed conflicts would continue indefinitely in the absence of action.

In his campaign, he’s not mentioning two key steps he contemplated during this summer’s budget negotiations: reining in Medicare and Medicaid growth. Even Obama loyalist Christina D. Romer, former chairwoman of his Council of Economic Advisers, recently argued that “compassionate deficit reducers should be specific about what they would cut.”

In mid-September, Congress was poised to pass a continuing resolution, holding agencies to their 2012 spending levels into late March 2013. Serious budget action to avoid the so-called fiscal cliff won’t occur until this November and December. With tax rates set to rise Jan. 1 and budget sequestration to take effect on Jan. 2, these negotiations will be critical, not least because Moody’s Investors Service warned on Sept. 11 that it would downgrade its rating on government bonds, as did Standard & Poor’s on Aug. 5, if there’s no budget agreement.

The real need, mostly unaddressed, is to solve the long-term gap between revenue and spending. But in the short term, the sequestration is of particular concern to managers in government agencies. For nonexempt discretionary spending in fiscal 2013, defense accounts would be down by 9.4 percent and nondefense accounts by 8.2 percent on an annualized basis.

But the cuts will not occur until after the first quarter of the fiscal year is already over. Agencies that spend 25 percent of their annual appropriation in the first quarter would have to absorb sequestration over the remaining nine months of the fiscal year, effectively adding as much as three to four percentage points to the reductions between January and October.

Secretary of Defense Leon Panetta said such cuts would be devastating. Scholar Norman J. Ornstein, co-author of a new book about Washington’s gridlock titled It’s Even Worse Than It Looks (Basic Books), predicts that sequestration cuts in the food safety inspection workforce would mean that 1 million pounds of tainted meat would reach grocery store shelves. Agencies heavy on personnel expenses would be looking at furloughs of considerable duration.

Despite wide revulsion at sequestration, it won’t easily be avoided. The best-case scenario in a postelection lame duck session of Congress, said one expert, would be passage of another process to address long-term deficit reduction while kicking sequestration and the looming tax increases down the road again for a few months. But that’s far from a sure thing, especially given the collapse of the last such effort.

The tension between dealing with short- and long-term problems—raised by sequestration and the need to increase the federal borrowing ceiling by early spring—will be the big story once the election is done and gone.

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Lessons on Finding Fair Pay For Feds

Timothy B. Clark — Wed, 26 Sep 2012 00:00:00 -0400

Toward the end of his richly anecdotal book, Who Gets What, compensation expert Kenneth R. Feinberg observes that when considering the fairness of pay, “everybody counts other people’s money.” Money, of course, is a key signal of success in our market economy. And federal workers today are increasingly subjected to pay and job security comparisons by private sector workers who are worried about their own pay—or lack thereof.

Feinberg has been the mediator and paymaster in high-profile cases where demand has arisen for “fair compensation after tragedy and financial upheaval,” as his book’s subtitle notes. Who Gets What (PublicAffairs, 2012) recounts the author’s experiences stretching from the post-Vietnam Agent Orange case in the 1970s to the ongoing case of the Gulf of Mexico oil spill. His experience bears testimony to people’s sensitivity about parity in compensation, and, perhaps, offers lessons for resolving the debate about appropriate pay for federal employees.

Public compensation programs are very much in the news. In California, voters in two large cities recently approved cuts in public pensions. Republicans in Congress have made many attempts to enact extended pay freezes or reductions for federal workers. In a document released in September 2011, GOP presidential candidate Mitt Romney implied that he might seek a pay reduction to “align federal employee compensation with the private sector.”

Obama has made “fairness” a watchword of his campaign—but so far it’s little more than a slogan justifying higher taxes on high earners. In contrast, Feinberg’s real-life experience shows what’s needed to find consensus about the fairness of other people’s pay.

He was drawn into the fairness game in 1984, when federal Judge Jack B. Weinstein recruited Feinberg, a former clerk, to work with the chemical industry and veterans groups to settle the nine-year class-action suit brought by victims of exposure to the chemical defoliant Agent Orange. Eight chemical companies settled for $80 million, an impressive sum at the time, but still not large enough to provide much money to those who could prove to Feinberg that they’d suffered adverse health effects.

Weinstein held hearings across the nation to seek veterans’ views on how to fairly distribute the money. Feinberg listened “in amazement as leaders of the Vietnam veterans community pleaded for money—not for themselves but for their brothers in arms who needed it more than they did.” Over 10 years, payments went to 52,000 individual veterans, but $42 million was used to fund legal, social and medical programs to assist families of the vets and other programs to inform the community about available government benefits.

In the end, he writes, the money was not as important as the facts of the settlement, viewed by vets as a “vindication of their suffering” and “an important step on their road to recovery.” More broadly, he adds, the program was “an important concluding chapter in America’s sad Vietnam experience.”

In 2001, Feinberg was chosen as administrator of the Sept. 11 Victim Compensation Fund. With few guidelines from Congress, and no limit on disbursements, he had to devise a matrix that people would view as fair. Were the lives of a waiter and an investment manager at the World Trade Center worth the same or not? Should people be compensated for pain and suffering? Would it be fair to give those without life insurance policies more than those who did buy such insurance? In the end, a system was devised to answer these and other questions, and the fund awarded $7 billion to the survivors of those killed and the injured victims.

Feinberg was called on to administer a privately raised, $8 million fund to compensate victims of the 2007 Virginia Tech massacre, which cost the lives of 32 people. Most recently, he was tapped to run the $20 billion fund pledged by BP, whose deep-drilling rig’s failure in 2010 caused an oil spill that despoiled coastlines and cost business owners billions of dollars in income. In between, Feinberg was recruited by the Treasury Department to establish fair and publicly acceptable standards for paying 175 top executives and earners at seven financial institutions that received the most assistance from the 2008 Troubled Asset Relief Program.

In meetings with the financial executives, he was told emphatically that compensation “was a symbol of self-worth. Compensation mirrored individual fulfillment [and] without generous pay, company officials would view themselves as failures.”

Subsequently, personal meetings, or public forums in the BP case, were essential to achieving acceptance of tough decisions, Feinberg concludes.

His experience may offer lessons to help in the polarized debate about federal pay. Today, there are too many competing sets of “facts”—from the Government Accountability Office, the Congressional Budget Office, conservative think tanks, not to mention the President’s Pay Agent. And those who believe feds are overpaid seem to be gaining the upper hand. Without a doubt, many with uncertain economic futures must envy the relatively good and certainly more stable paychecks and benefit packages that feds enjoy—including pension programs rarely matched in the private sector. They surely are counting other people’s money.

To borrow from the Feinberg model, one could appoint a neutral party, as Feinberg has been, to hold public forums nationwide that would air the issues, educate the public, generate consensus about what’s fair and, incidentally, attract more people to federal service.

My candidate for the position: Paul A. Volcker, who has sponsored two commissions on public service reform and has not shied from various other high-profile public-interest tasks. The former Federal Reserve chairman has the credibility to get the job done.

(Image via venimo/Shutterstock.com)

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Fair Pay For Feds

Timothy B. Clark — Sat, 01 Sep 2012 00:00:00 -0400

Subsequently, personal meetings, or public forums in the BP case, were essential to achieving acceptance of tough decisions, Feinberg concludes.

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What do people want from government?

Timothy B. Clark — Fri, 10 Aug 2012 15:58:00 -0400

How much government do people want?

With the presidential election approaching, answers to that question could shed light not only on prospects for the candidates, but also on their ability to reshape the public sector if elected.

Historians would note the nation was founded in revolution against oppressive government. And still today, many would agree with Ronald Reagan’s view that “government is not the solution to our problem; government is the problem.”

But we have seen an inexorable march toward bigness. Federal, state and local governments now consume about 35 percent of our gross domestic product. The public sector arguably is as big as in European nations when one counts “tax expenditures” promoting home ownership, employer-provided health care and other purposes. Beyond spending, public agencies at all levels have woven a complex and extensive network of regulation.

The question is timely not only because of this year’s elections, but also because big government is being put to the test—in Washington to be sure, but even more starkly in state capitals, city halls and county seats. Washington can borrow profusely to fund its spending desires, but that’s not true beyond the Beltway, where real choices about public services are being made to satisfy requirements for budget balance.

More than 600,000 public sector jobs have been eliminated, so public schools have larger classes; state university systems are cutting staff and raising tuition; and communities are losing police, fire, library and other public services.

Do people care? Are they ready and willing to make do with smaller government? If the states are laboratories of democracy, the answers may hold lessons for our leaders in the nation’s capital.

The 2010 congressional elections that brought many Republicans to power were the last significant test of the popular mood about federal government. But then, this spring, another test of political philosophy emerged in Wisconsin, long a bastion of liberalism. Public sector unions, deprived of collective bargaining rights by a GOP-controlled government led by Gov. Scott Walker, mounted a recall effort that served as a magnet for the fundraising and organizing powers of both parties. When Walker beat back the recall, some saw another sign of fatigue with activist government.

This fall’s contest between President Obama and his Republican challenger, Mitt Romney, is stacking up as a historic test that will set the course of government for years to come. On issues like taxation, spending, regulation of banking and the environment, incentives for energy production, the structure of Social Security and Medicare, and more, the choice is more consequential than any in recent times.

In the August issue of Government Executive, Editor at Large Timothy B. Clark explores Americans' views of government. Click here to read the full story.

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